Thank you so much for your patience in allowing me to respond
I know that you don't want to hear "leave the job you love," and that certainly is not what I am going to tell you to do. However, I also hope that you can appreciate my limitations in explaining how the law actually operates under the circumstances, even if it is not favorable, and even if it is not what you want to hear. I trust that you will find value in that.
I say all this because an employee's rights under the circumstance you describe are extremely minimal. This is because the state of California ascribes to the doctrine of "at will" employment, which provides that either party (employer or employee) may terminate the employment relationship at any time and for any non-discriminatory reason, regardless of whether the basis is fair or reasonable. Since employers can terminate employees for any reason, employers can also make employment decisions at their discretion, again without regard to what is fair or reasonable.
The courts have made very clear that, absent discriminatory motives (i.e., race religion, gender, ethnicity, etc.), they will not be the arbiters of general claims for workplace unfairness, reasoning that if such cases were allowed to proceed, hundreds would be filed every day. This is certainly not to diminish your frustration, which is justified, but rather to explain the policy behind the law, which may assist in your understanding.
The only conceivable basis for a claim that would arise from the facts you have described is a claim for discrimination on the ground that an employee having a sexual relationship with your VP is enjoying favorable treatment as a result their gender.
Title VII of the Civil Rights Act of 1964 prohibits discrimination that occurs "because of [an] individual's sex…" The problem with a discrimination claim on this basis, however, is that courts have rather consistently held that favorable treatment occurring as a result of a romantic relationship is not favorable treatment "because of sex" within the meaning of Title VII, but rather is favorable treatment because of a personal relationship, which is not illegal.
Again, since the law provides no remedy for workplace unfairness that is not premised on a discriminatory motive (those being race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age (over 40), or sexual orientation), the treatment you are describing, while completely unfair and unprofessional, is probably not illegal.
All of the above noted, it is expensive to re-hire and re-train new employees, and if you were to be fired, you could generally file for unemployment which would affect your employer's unemployment insurance premium. This is to say that employers generally do not want to terminate employees any more than employees want to be fired, and so employers tend to be rationale about these sorts of decisions.
For these reasons, the best course of action in the circumstance is an interpersonal approach, explaining your feelings in writing and offering some sort of compromise, if at all possible. I realize that you may have already done this, but since there are no legal remedies, it may be an approach worth revisiting.
I am terribly sorry to deliver this news to you, as I realize it is not what wanted to hear. Nonetheless, I trust that you will appreciate my limitations is explaining how the law actually operates under these circumstances, despite the law not being favorable to your circumstances. Indeed, to provide anything less would be unfair to you and unprofessional of me.
Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.
If you do not require any further assistance, I would be most grateful if you would remember to provide my service a positive rating, as this is the only way I will receive credit for assisting you.
Finally, please bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.